The drama which has been passing in the United States since the opening
of the session, has now reached the end of the first act. The two
Houses have had under consideration the subject of the removal of the
public deposits from the Bank of the United States to the local banks,
by the Executive, and both of them have come to a decision. The Senate
has declared, by a majority of 28 to 18, that the reasons alleged
by the Secretary of the Treasury in justification of the measure,
were neither satisfactory nor sufficient, and, by a majority of 26
to 20, that the conduct of the President in this matter was neither
conformable to the constitution nor to the laws. This is the first
instance, since the adoption of the Federal constitution, of a censure
of the chief magistrate of the nation by the Senate. The House has
resolved, on its part, that the charter of the Bank ought not to be
renewed, that the public deposits ought not to be restored to it, and
that they should remain in the safe-keeping of the local banks. The
first resolve passed by a vote of 132 to 92; the majority for the two
others was much less, 118 to 103, and 117 to 105. It has been resolved,
by a large majority, 171 to 42, that the conduct of the Bank should
be made a subject of investigation, but this majority includes many
friends of the Bank.
It is to be hoped that the Bank will not be the object of this
campaign; the more vigourously it is defended, the more hateful it
becomes to the democracy. Those who feel an interest in their country
and its institutions, ought to make an effort to turn the debate toward
some other point, for both sides have become heated and exasperated
in the struggle, and already violence has been threatened. The most
brilliant services have been forgotten, the purest characters trampled
under foot. The Globe, the avowed organ of the administration, pours
forth the vilest slanders on men, such as Messrs Clay, Calhoun, and
Webster, of whom any country in the world would be proud. It repeated,
and unhappily it reiterates still, that the votes of, the Senate have
been bought by the Bank. On the other hand, General Jackson, to whom
it is impossible to deny the possession of eminent qualities, has
been himself exposed to the vilest indignities; the gray hairs of
that brave old man have been insulted in the most scandalous manner.
Attempts have even been made to throw ridicule on his victory at New
Orleans, the most brilliant affair in the American annals, as if his
glory were not the common property of the country. Some hot heads have
even talked of recurring to violence; commerce and enterprise have
been struck numb; for want of means, the great works of Pennsylvania
have been in danger of being brought to a stand. But at present there
appears to be a general wish to bring back a calm; the failure of a
certain number of individuals, and especially that of some banks, have
proved a signal of alarm, which has recalled every one to a sense
of the common danger, the general ruin that threatened the country.
There has been a failure of a bank in Florida, of one in New Jersey,
and of two in Maryland, one of which, that of the Bank of Maryland in
Baltimore, has caused a great sensation. The leading men of all parties
have set themselves in earnest to search out some means of bringing the
commercial crisis to an end. There is room to hope, therefore, that
the debate will lose its bitterness, and at the same time will take a
wider range; instead of quarrelling about the particular question of
the Bank, it were to be wished that the higher questions of political
economy should be discussed, such as that of a mixed currency, in which
there should be the proper mixture of paper and the metals necessary
to give it stability, without keeping, as is the case in Europe, a
large unproductive capital in the shape of specie; and that of a system
of institutions of credit, banks of loan and discount, of deposit
and exchange, powerful enough to serve as a spring and a stay to the
industry of the country, and yet so balanced in respect to each other
and the powers of the government, as not to be dangerous to the public
liberties. A very able speech of Mr Calhoun's has already drawn the
general attention to the subject of financial reform, and one of the
senators friendly to the administration, Mr Benton, has embodied some
of Mr Calhoun's ideas in the shape of a bill.
It is now universally agreed, that to obtain a solid and stable
currency, it is necessary to keep a certain quantity of gold and
silver in the country; it is seen that while there are paper dollars,
the silver dollars will disappear, that ten-dollar notes necessarily
expel the eagles, and that half-eagles will not stay where there
are five-dollar bills. It is, therefore, proposed to abolish the
issue of notes of less than ten or even twenty dollars, but all that
Congress can do without the aid of a National Bank, is to prohibit
the reception, by the collectors of the customs, of the bills of
any bank which has in circulation notes of less than ten or twenty
dollars; for Congress has no direct power over the local banks. This
measure, however, would be insufficient; for the amount of money paid
for customs bears a very small proportion to the whole circulation
of the country, and consequently would not affect the circulation in
districts remote from the sea coast. The Administration does not deny
the necessity of a police for controlling and regulating the banks;
it seems disposed to effect it by means of some of the local banks,
which should act under the direction of the Secretary of the Treasury,
and to which should be granted certain privileges, such as that of
being the depositories of the public money without paying interest.
But this plan has some disadvantages; it would invest the Secretary,
that is the President, with a great discretionary power, which is
wholly at war with the political maxims of American government. It is
a received truth in the United States, that the sword and the purse
ought not to be in the same hands. Beside it is doubtful whether this
control would be sufficiently powerful and sufficiently enlightened,
and finally it would be difficult by means of this chain of local banks
to answer one of the most pressing wants of the country, facility of
exchange; because they are, and must be as slightly connected with each
other, as the sovereign States from which they hold their charters.
To exterminate small bank-notes the surest agent would be a National
Bank, and Congress has the power to establish one. This power, which is
disputed because all its powers are disputed, would not be contested,
if it were stipulated that the Bank should obtain the consent of each
State, before establishing a branch within its limits. It would then
be sufficient that the Bank should not receive the bills of any other
bank, which issued notes of less than 10 or 20 dollars, or which
received the bills of other banks, that issued notes less than the
same minimum. In fine, a National Bank is an admirable instrument of
exchange, and the most influential friends of the Administration are
convinced of the necessity of an institution of the sort. I cannot
believe that the President, and especially the Vice-President, are
really as much opposed to one, as they have the air of being. As it
is possible to conceive of a combination of circumstances, which may
reconcile its existence with the interests and views of Mr Van Buren
(such would be, for instance, the creation of a Bank of which the seat
should be New York, instead of Philadelphia), it may be hoped that
sooner or later, under one form or another, Mr Van Buren may yield to
the necessity of the case. It is true that out of hatred to the present
Bank, the prejudices of the multitude have been excited against the
establishment of any bank at all, and it is much more easy to rouse the
popular passions than to control them when once let loose; this kind
of game has resulted in the self-murder of many a man's popularity.
But in this matter the voice of the public interest and of individual
interest will speak so loud, that it would be astonishing if it did not
make itself heard by a people, so much more sensible and reflecting
than most of the European people. There is, then, in short, still some
chance for a Bank of the United States.
The following are the principal features, in which both parties seem to
me to be at present tacitly agreed. The capital of the Bank to be about
50 millions. The shares of the present Bank, representing a capital of
35 millions, to be exchanged at par for shares in the new bank; the
rest of the capital to be subscribed by the individual States, thus
giving the Bank a more truly national character: The rate of discount
to be reduced from 6 to 5 per cent.; Mr Forsyth, a Senator friendly to
the administration, has demanded this modification: The laws relative
to public and private deposits to be changed in conformity with the
propositions of Mr Cambreleng: The seat of the mother bank to be
transferred to New York: The operations of the Bank to be subjected to
more strict regulations than those of the old Bank have been: The Bank
to be required to keep on hand a larger amount of reserved profits, or
some other provision borrowed from the bank of England to be adopted,
in order to give more security to the institution.
It would not, probably, be impossible to unite a majority of the two
Houses in favour of a plan which should embrace these features. But
there is another subject about which little is said, and upon which
no one has yet publicly declared himself, although there are many
who have thought much about it, and it will not be easy to reconcile
opinions upon it. How shall the Bank be governed? What relation shall
there be between the administration of the Bank, and the Federal and
State governments? How and by whom shall the President of the Bank be
chosen? This subject, about which there is a total silence, appears
to me to be of so vital importance, that I am convinced that what has
occurred in the United States during the last six months, would never
have taken place, if the nomination of the President of the Bank had
been lodged with the President of the United States. In Europe and
particularly in France, the government of the banks is more or less
in the hands and under the control of the king and the ministers. In
America, conformably with the principles of self-government, the Bank,
like all the other industrial and financial institutions, has, up to
this time, governed itself. The Federal government, owning one fifth of
the shares, names one fifth of the directors; its powers stop there.
The American axiom, which forbids the union of the sword and the purse
in the same hand, is opposed to the exercise of a controlling influence
over the choice of the President of the Bank by the President of the
United States; and yet I am persuaded that the democratic party will
not be willing to hear of a Bank, in the government of which it could
not interfere.
The upper classes (_bourgeoisie_) are not here what they are in Europe;
while in Europe they rule, here they are ruled. Democracy takes its
revenge in America for the unjust contempt with which it has been
so long treated in Europe. Now it is to these upper classes, that
the private share-holders of the Bank belong; it is the merchants,
manufacturers, and capitalists, who will always derive the most direct
benefit from a National Bank, although all classes must indirectly
derive great advantages from it. From the time when the upper
classes sanctioned a completely universal suffrage, without making
any exception in favour of natural superiority, whether industrial
or scientific, from the day when they consented that number should
be every thing, and knowledge and capital nothing, they have signed
their own abdication. It is too late to agitate the questions, whether
this is absolutely a good or an evil, or whether it is well, in the
agricultural States, with a scattered population, such as Ohio,
Indiana, and Illinois, and bad in large and populous cities, the
seats of a vast commerce, such as Philadelphia and New York. This is
a matter already settled past recall; when the sword is surrendered,
the vanquished must submit to take the law from the victor. In case,
then, of the creation of a new National Bank, the share-holders must
consent to receive their head, either from the President and Senate,
as other public functionaries are appointed, or from the House of
Representatives alone, or from some other similar source. If in a new
or a somewhat modified Bank, the Federal and local governments should
be stockholders to a large amount, this participation of the President
or the House of Representatives, or of special delegates chosen by the
States, in the government of the Bank, would appear altogether natural,
even in the eyes of the most exclusive partisans of self government.
It remains to be seen, whether in this case, the Bank would not be
more likely to become the instrument of party, a _den of intrigue and
corruption, a golden calf_, a _monster_, as it is so often unjustly
called, than in the present state of things.
If this quarrel should be terminated by a compromise, we may expect
that it will be effected on the basis above stated. The upper classes
will, perhaps, consider the conditions as hard, but they should beware
of rejecting them. It would be a great gain to them to obtain, under
any form, a decisive sanction of a National Bank, connected with the
government, and therefore incorporated with the interests of the
country. Not only are numbers at present against the Bank, and numbers
give the law here, but the Opposition is not so well organised as the
democratic party. The Opposition has, indeed, three leaders, who do not
always agree; the views of Mr Calhoun of South Carolina do not coincide
with those of Messrs Clay and Webster on the subjects of the tariff
and States' rights; and Mr Clay, the son of the west, and Mr Webster,
who comes from Boston, the focus of Federalism, differ on several
constitutional questions. The democratic party, on the contrary, is
better disciplined; the two heads, General Jackson and Mr Van Buren,
present a formidable union of qualities and faculties. The old General
is firm, prompt, bold, energetic; Mr Van Buren, who sets up for the
American Talleyrand, is mild, conciliating, prudent, and sagacious;
his adversaries call him the little magician. While the pretensions
of Messrs Clay, Calhoun, and Webster are scarcely to be reconciled
with each other, and neither of them is willing to be second, Mr Van
Buren is ready to serve under General Jackson for the purpose of
becoming his successor in the elections of 1836. Every kingdom divided
against itself cannot stand. But, if no compromise can be made, if the
democracy is too untractable, and the upper classes persist in claiming
more than their position authorises them to do, if the feelings, kept
in a state of excitement, become exasperated on both sides, and the
contest be too much prolonged, the most frightful consequences may
ensue; even the Union may be endangered.
At the close of the war of Independence, the American Confederacy
occupied only a narrow strip along the Atlantic. Since that time the
wave of an active, enterprising, and rapidly increasing population, has
rolled over the Alleghanies, the Ohio, the Mississippi, more recently
over the Missouri, the Red River, the Arkansas, and I know not how far.
Toward the South it is already sweeping over the Sabine, and covering
Texas, while toward the West, it has topped the Rocky Mountains, and
is approaching the Pacific shore. Instead of thirteen States, there
are twentyfour, and the number will soon be increased to twentysix. By
the side of the old Atlantic strip, two other vast tracts with a more
fertile soil, have yielded up their riches to civilised man; one, at
the west, comprises the great triangle lying between the Ohio, the
Mississippi, and the lakes, and the other at the south, includes the
fertile regions of Florida and Louisiana, which, under the French and
Spanish rule, were a solitary wilderness. The geographical centre of
the Union fifty years ago was on the banks of the Potomac, on the spot
where the city of Washington--that paper capital--now stands; it is now
at Cincinnati, and will soon be near St Louis. In proportion as the
territory of the Confederacy has been extended, the Federal bond has
been weakened. It was nearly snapped asunder during the Nullification
crisis, occasioned by the resistance of South Carolina to the tariff
adopted under the influence of New England, in order to protect her
growing manufactures. If Congress had not satisfied the demands of
South Carolina, Virginia would have made common cause with the latter,
and her example would have carried the whole South. The patriotic
eloquence of Mr Webster, the moderation of Mr Clay and his prodigies of
parliamentary strategy, the efforts of Mr Livingston, then Secretary
of State, the firm, and, at the same time, conciliatory conduct of
the President, who, for the first time, heard a bold defiance with
patience, and the calm attitude of the Northern States, prevented for
the moment a general dissolution of the Union; but the germ of mischief
remains; the charm is broken; the ear has become familiar with the
ominous word SEPARATION. A habit has grown up of thinking, and even of
declaring, whenever the interests of the North and the South jar, that
the cure-all will be a dissolution of the Union.
South Carolina keeps her militia organised, and exacts from the State
officers a special oath of allegiance. Georgia and Alabama contest
the validity of treaties concluded between the Federal government and
the Cherokee and Creek nations. (See _Note_ 11.) Most of the States
seek to extend the limits of their individual sovereignty. The
doctrine of State rights has even insinuated itself into the bosom
of orthodox Philadelphia, for I see by the journals, that a States'
rights dinner is announced there. These symptoms may become full of
danger in a moment of universal excitement. When the passions are at
the helm, there is no pause in the course. What, for instance, would
be the event, if Nullification should find an echo in the same States
of the North, where it has lately been so firmly rejected? It is they
that have the most direct interest in the establishment of a National
Bank; it is they that suffer most from the financial combinations of
General Jackson, and from the objections of Southern statesmen against
the constitutionality of a bank. Although no allusion is made to this
danger, it is evident that the solicitude of many persons has been
aroused by it, and it is fortunate that it is so, for a more general
disposition to conciliatory measures is the consequence.
The principle of separation is engaged in a deadly conflict with the
spirit of centralisation or consolidation; hardly was the constitution
signed, when twelve additional articles or Amendments were immediately
adopted, almost all of which contained restrictions on the powers and
attributes of the Federal government. At the same time the authority of
Congress to charter a Bank, and give it powers within the territories
of the States, was contested; on this point, however, the principle of
union was victorious, and the Bank was established. Next, the right
of engaging in Internal Improvements was denied to Congress, which,
after a long struggle, has been compelled to resign its claims; General
Jackson willed it, and it was done. The National Road, which extends
from Washington to the western wilderness, and for which appropriations
have been annually voted, each professing to be the last, shows what
the Federal government could do and wished to do. Even the uniform
system of weights and measures, seems to be on the point of being
broken up, in spite of the express provisions of the constitution.
Pennsylvania has undertaken, nobody knows why, to establish regulations
on this point contrary to the general usage.[P] The public debt is now
paid; that is one Federal tie the less. The Bank, assailed afresh,
is on the point of falling; that is an immense loss to the Federal
principle. The Supreme Court of the United States, one of the bulwarks
of the Union, is assaulted. The vast domain of the West, (see _Note_
12,) the national property, seems in danger of being given up to
individual States, for this disposition is one of the favorite topics
of the democratic party.
But if centralisation comes off the worse in Federal politics, it
has the better within the States. The principal States are engaged
in constructing vast systems of internal communication; they are
establishing for themselves financial systems, and many of them
are about to set up great banks, which shall exercise within their
respective limits the salutary influence possessed by the Bank of
the United States throughout the whole Union. Thus each State, as
it detaches itself from the Federal Union, organises more fully its
own powers, and binds more firmly together its imperfectly combined
elements. But, on the other hand, industry and the spirit of enterprise
restore to the Union the strength, of which political jealousy and
party quarrels tend to deprive it. There is not a family at the
North, that has not a son or a brother in the South; the community of
interests daily grows stronger; commerce is a centripetal force; along
the whole Atlantic coast there is only one mart, New York; there is
only one of importance on the Gulf of Mexico, New Orleans; and the
relations of New York and New Orleans make these two cities, instead
of rivals, mutual supports. The railroads and the steamboats spread
over the country the meshes of a net not easily broken; great distances
vanish; before long it will be easy to go from Boston to New Orleans
in eight days, less time than is generally required to go from Brest
to Marseilles. When we reflect on the extent of the Roman empire for
ages, we cannot doubt the possibility of maintaining a certain degree
of unity on the American territory, immeasurably vast as it appears to
an eye accustomed to the divisions of the map of Europe. The Romans
had not attained that degree of perfection in the means of intercourse
which we possess; not only had they no knowledge of steamboats and
railroads, and the telegraph, but they had few highways, and were
unacquainted with the use of carriages hung on springs. The progress
of commercial and financial arts, makes it more easy to manage the
financial concerns of the universe now, than it was to administer
those of a province in the time of Cæsar. I cannot, therefore, make up
my mind to believe, that the Union will be broken up into fragments,
driven in different directions and dashing one against another.
And yet it is very possible, that the Union will not continue long on
its present footing. Are the relations established between the States
by the constitution of 1789, the most perfect that can be devised
now? Ought not the unforeseen formation of the two great groups of
the West and the Southwest be followed by some modification of those
relations? Would not the subdivision of the general confederacy into
three subordinate confederacies, conformable to the three great
territorial divisions, the North, the South, and the West, with a more
intimate union between the members of each group, have the effect of
satisfying the advocates of State rights, without endangering the
principle of union? Would not this arrangement be the means of giving
more elasticity to the Union? Could not the existence of three partial
confederacies be reconciled with that of a central authority, invested
with the undisputed powers of the present Federal government, one army,
one navy, one diplomatic representation abroad, one common right of
citizenship, one Supreme Court, and, as far as possible, one system of
customs, and one Bank? These are questions, which it will, perhaps,
be worth while to examine some day, and even at no distant day. But
it would be desirable, that they should be approached and discussed
with calmness. If they should be unexpectedly raised in a period of
irritation and bad feelings, they would be the signal of a deplorable
catastrophe. Union gives strength; North America, once parcelled out
into hostile fragments, would be of no more weight in the balance of
the world, than the feeble republics of South America.